Evaluating Dental Service Organizations (DSOs): Making the Right Move for Your Dental Practice

November 28, 2018

Dental Service Organizations (DSOs) are changing what it means to grow a dental practice and shifting the dental industry as a whole.‍

Not long ago, scaling your private practice meant hiring more staff, opening new locations, or taking on consultants. Today, many dentists are turning to large DSOs that promise to do all this work — and then some.

While the definition is different for every organization, DSOs essentially help dentists separate the clinical from the clerical.

DSOs typically own the practice, the equipment, and the building. They have the potential to manage everything from payroll to pay-per-click ads.

As a result, dentists are then free to do clinical work and keep patients and employees moving.

Idyllic as this sounds, DSOs are not universally lauded. As with most things in life, they have both proponents and detractors.

Differing Thoughts About DSOs

DSO advocates enjoy the aforementioned aspects of the business model. Dentists can hone their craft, free of everything else that comes with running a successful practice.

Detractors view DSOs as an invasion of corporate dentistry. They're killing off smaller practices and boxing out independent practices. They are to dentistry what Walmart was to mom-and-pop shops.

Whichever side of the fence you fall on, the truth is that DSOs represent a business model physicians have been using for decades. Only it's now become more pronounced in dentistry, as DSOs attract more and more dentists every year.

One study reported that the number of practices joining group practices is growing at nearly three times the rate of the dental industry itself.

Additionally, the ADA recently published new data revealing that 7.4 percent of all dentists practicing in the U.S. are affiliated with DSOs. That number jumps up to 16.3 percent for dentists ages 21-34.

Evaluating DSOs

DSOs are an undeniable game-changer, providing dentists with support, strategy, and potentially more money for less stress.

But at what cost to dentists?

This is the burning question for any independent practice owner wondering if it is time to make the switch.

As you weigh your options, it is all about doing your homework and finding the right fit for your practice. These are some factors you should take into consideration.

Updated Technology

Having access to state-of-the-art technology DSO dental marketing and patient communication software is one of the most enticing perks of joining a DSO.DSOs will often do the research, the negotiating, and the installation for you.

You might have less say about what technology you implement, but that's counterbalanced by having tech support available to take care of hardware and software issues.

Compliance Assistance

Keeping up with HIPAA, OSHA and other regulatory groups can be a full-time job in itself.

As technology continues to change how dentists communicate with patients, and as the laws adapt, compliance will only become more complex.

DSOs can take on all this responsibility to give you more time with patients.

Insurance Support

Handing over insurance responsibilities to a DSO saves you the headache of processing paperwork. It also alleviates continuing education needs of constantly having to know the in-and-outs of convoluted policies.

Less time with insurance companies means more time doing actual clinical work.

Another benefit of working within a network of dentists is the ability to negotiate better insurance rates for your patients.

This can translate to a significant boost in revenue, as insurance drives so much of the dental industry.

More Growth and Collaboration

By working with other dentists at a DSO, you also have the opportunity to learn from your peers, expand your skill set, and mentor younger colleagues.

Working in a professional community keeps your perspective fresh and gives you access to valuable networking opportunities.

Some DSOs also bring in specialists to feature certain procedures (endodontics, whitening treatments, etc.), offer special training, and provide resources to help you grow professionally.

This has made the DSO market particularly attractive to younger dentists who are new to the industry and eager to expand their skillset.

Better Work-Life Balance

Managing a practice while actually practicing clinical care is a huge time-commitment. Particularly for dentists just getting started, it’s easy to lose track of all the hats you have to wear.

Taking on all the responsibilities of owning a practice might be exciting at first, but it can quickly become unmanageable without help.

It is the same struggle that causes many doctors to opt out of private practice. One survey showed that 81 percent of all physicians who owned their own practice reported feeling overextended by constantly having to work at full capacity.

Giving away some administrative responsibilities to a DSO allows you to focus on your patients, have a life outside the office, and prevent burnout.

Less Independence

Having to answer to a manager is, by far, the biggest hurdle for private practice owners who are used to working independently.

There are still plenty of dentists who love the business side of dentistry and value the sense of ownership that comes from having a hand in every aspect of the practice.

For dentists with this entrepreneurial streak, forming your own DSO is a potential option if your goal is to scale your business and brand.

Losing Equity in Your Practice

It is possible to take a financial hit when selling your practice to a DSO. When a DSO purchases a practice, it intends to make money on the investment.

By giving up ownership, you lose all equity and rely solely on a salary or contracted rate.

This might be a significant risk for a successful private practice owner early in his or her career, but for dentists looking toward retirement and an option for part-time work, the choice could work in your favor financially.

Working with Contracts

Contracting with a DSO means agreeing to play by their rules.

Knowing every detail of your contract as it describes your role in the DSO is crucial to a successful partnership. This is particularly true when it comes to recommending treatments for patients.

For example, let’s say you join a DSO and find that you are not being given enough time to provide patients with the best treatment options. Instead, the responsibility is being given to a non-clinician in a way that goes against your own ethics. How would you react in this situation?

Breaking your contract is much more complicated than leaving a regular private practice, and often DSOs will have a legal team in place to dispute these issues.

To prevent any legal issues, be as thorough as possible when reviewing the contract. Talk to current DSO members and consult a legal representative to get a full picture of how the DSO operates.

Future of DSOs

For all their pros, cons, pitfalls, and potentials, DSOs are here to stay.

Their popularity will likely continue to increase, but there will always be a place in the market for privately-owned dental practices of all sizes.

Choosing the right path for your practice is all about knowing what you value in a workplace and then finding the practice or Dental Service Organization that properly aligns with that vision.